Little Miss Buffet takes all the money from her piggy bank and puts it into a savings account at her local bank. The bank promises an annual interest rate of 2.5% on the balance, compounded semiannually. How much will she have after one year if her initial deposit was $200?
A) $205.00
B) $205.01
C) $205.02
D) $205.03

Question

Little Miss Buffet takes all the money from her piggy bank and puts it into a savings account at her local bank. The bank promises an annual interest rate of 2.5% on the balance, compounded semiannually. How much will she have after one year if her initial deposit was $200?
A)	$205.00	
B)	$205.01	
C)	$205.02	
D)	$205.03

anonymous · Answer

What do you think it is?

khalilforthewin · Answer

D or B but im not sure which one

anonymous · Answer

Neither

anonymous · Answer

What's 2.5% of 200?

anonymous · Answer

No

anonymous · Answer

let's go deeper into that question

khalilforthewin · Answer

250

anonymous · Answer

So a % goes up to 100%

anonymous · Answer

So 2.5%
Is like saying 2.5/100 (fraction

khalilforthewin · Answer

40

anonymous · Answer

And 200 is twice as much as 100 (obviously)
So to figure out what 2.5% of 200 is, you need to double 2.5

anonymous · Answer

So what's 2.5 x 2?

khalilforthewin · Answer

5

anonymous · Answer

Yep

anonymous · Answer

Little Miss Buffet takes all the money from her piggy bank and puts it into a savings account at her local bank. The bank promises an annual interest rate of 2.5% on the balance, compounded semiannually. How much will she have after one year if her initial deposit was $200?
A)	$205.00	
B)	$205.01	
C)	$205.02	
D)	$205.03
Which one adds that ammount that you just stated to 200?

retireed · Answer

it is compounded semiannually.

retireed · Answer

It is either B or D.  Was a correct response.

anonymous · Answer

Even if it's semiannual, the answer stays the same as annual

retireed · Answer

WRONG

retireed · Answer

Why would they bother saying semi-annually?

anonymous · Answer

Oh, sorry I forgot there was a formula for this

anonymous · Answer

A=p(1+rn)nt

retireed · Answer

That's better.

khalilforthewin · Answer

so is it B?

anonymous · Answer

p is the initial amount which is 200 in our case
r is the interest rate which is 0.025 always write in decimal form 
n is the number of compounding a year which is 2 because every 6 month
t is the year which is 1

retireed · Answer

A=p(1+rn)^nt    make sure to indicate the exponent

anonymous · Answer

A=200(1+0.0252)2

anonymous · Answer

It's not B

khalilforthewin · Answer

its D

anonymous · Answer

Correct

anonymous · Answer

205.03

anonymous · Answer

All the options in my opinions are wrong. 
$$C = P.(1 + r / 100)^{nt}$$
$$\ so  C = 200.(1 + .025)^{2} = 200.(1.025)^2 = 210.125???$$

anonymous · Answer

which does not match any option? Is option or data correct?

anonymous · Answer

Yeah it is the answer's D

anonymous · Answer

You're using the wrong formula for this

anonymous · Answer

A=p(1+rn)nt 
p is the initial amount which is 200 in our case
r is the interest rate which is 0.025 always write in decimal form 
n is the number of compounding a year which is 2 because every 6 month
t is the year which is 1

retireed · Answer

Your right the equation was wrong

    A=p(1+r/n)^nt       divided the rate by the number of periods

anonymous · Answer

Wait, so none of the answer's are correct?

anonymous · Answer

Yep sorry I forgot the r /n thing.

retireed · Answer

It is D but your equation was incorrect and I missed the mistake.

anonymous · Answer

No the answer is correct. It was my mistake. I mistook the formular.

anonymous · Answer

Ahh, ok

retireed · Answer

You followed the incorrect equation.

anonymous · Answer

Yeah, because I was pretty sure that D was the answer

anonymous · Answer

@retirEEd You are right. Its not multiplication with the periods in rate, it should divide

retireed · Answer

Sorry for the confusion, but that's how we learn not to make that mistake in the future.

anonymous · Answer

Yeah :)